Shareholders baulk at R&SA Codan bid

Shareholders indicated their disapproval of Royal and SunAlliance’s (R&SA) tender offer for its remaining stake in Danish insurance company, Codan Forsikring.

R&SA shares dropped 10p when the group launched its £584m bid to take full control of Codan, partly funded by a £300m equity placing.

R&SA already owns 72% of Codan and said it expected the acquisition to simplify the group structure and capital position.

A Danish news agency reported that pension fund ATP, which holds 5% of the shares in Codan, was “not impressed” with R&SA’s recommended tender offer of Dkr605 (£55) per share.

Fitch Ratings said it affirmed the insurer financial strength rating of R&SA at ‘A-‘ following the announcement of the proposed minority buy-out.

Fitch said the net capital expenditure required by the purchase will result in moderate deterioration of capital strength without increased future profitability.

As Insurance Times went to press R&SA shares were trading at 161p.

Meanwhile shares in Jardine Lloyd Thompson (JLT) jumped 22p last week following news that it had received valid acceptances in respect of 87% of Pavilion Insurance Network shares.  

On 18 April, JLT extended its 12p per Pavilion share offer lifting the total purchase price by 8% to around £7m.

In a statement, Pavilion recommended that shareholders accept the revised offer, describing it as “fair and reasonable”.

As Insurance Times went to press JLT shares were trading at 477p.